CALGARY – Gary Sorenson — one in a pair of alleged masterminds behind a $100 million Calgary-based Ponzi scheme — has been arrested at the Calgary airport and will be released on bail, the RCMP reports.
Earlier this month, the RCMP charged Sorenson, 66, and Milowe Brost, 55, with theft and fraud in relation to a complex, Ponzi-like plot alleged to have bilked some 3,000 Canadians and investors abroad of $100 million, and possibly as much as $400 million.
The scheme, which the RCMP now say "appears to be the largest Ponzi-type scheme" in Canadian history, allegedly played out between 1999 and last year.
RCMP would not disclose where Sorenson was travelling from, except to say it was from outside of Canada. Last week, police said they believed Sorenson was living in Honduras.
RCMP said arrangements had been made so that Sorenson knew he would be arrested as soon as he landed on Canadian soil. Shortly after Tuesday’s late-morning arrest was made, Sorenson’s criminal lawyer Don MacLeod declined to comment.
"This arrest is an important milestone in our investigation," RCMP Supt. Eric Mattson said in a news release Tuesday. "We worked closely with Alberta Justice’s Special Prosecutions and the Public Prosecution Services of Canada in ensuring Sorenson’s return to Canada."
Mounties allege that Sorenson and Brost created a business, Syndicated Gold Depository S.A., and then formed an agreement to loan money to Merendon Mining Corp. Ltd. with the promise of a high rate of returns. According to the company’s website, Sorenson is the CEO of the company.
Investor money was funnelled through a series of shell companies and much of it ended up in Honduras bank accounts, RCMP allege in court documents.
Brost was arrested Sept. 13th and is already out on bail. The terms and conditions of Sorenson’s bail are similar to those of Brost. Sorenson was released on surety of $300,000 or $150.000 cash, and had to surrender his Canadian passport and other travel documents. He has been ordered to report weekly to the RCMP, remain in Alberta, live at an address approved by by the RCMP, and have no communication with a list of names provided by the RCMP.
There are a stunning array of facets to the alleged scheme.
For instance, the Canada Revenue Agency is conducting its own investigation. The agency alleges in court documents that more than $92 million of investor funds were funnelled to various companies controlled by Sorenson between 2000 and 2005.
The federal tax agency alleges Sorenson was the “main beneficiary” of an RRSP strip scheme, a plot where investments are falsely promoted as Registered Retirement Savings Plan or Registered Retirement Income Fund eligible.
High returns of three to five per cent per month, for offshore investments, were also offered to investors.
It is understood that efforts are afoot to liquidate various properties believed to be owned by Sorenson, his wife Thelma, or the Merendon companies in Honduras.
KCRYDERMAN@THEHERALD.CANWEST.COM
tseskus@theherald.canwest.com
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